Update on Sailpoint Technologies (SAIL)

Back in February, I posted a few quick (and somewhat non-technical) thoughts on why I bought into SAIL: http://discussion.fool.com/why-i-bought-sailpoint-technologies-s….

Bear noted that SAIL is growing slower than OKTA. When SAIL reported Q1 earnings on May 9th, their revenue was $49.7M and grew by 40% year-over-year. Revenue is split into three categories:

Licenses: $17M, +39% YoY (also down from $36.7M in Q4 2017)
Subscriptions: $23M, +54% YoY (up from $21.2M in Q4 2017)
Services & Other: $9.7M, +17% YoY (down from $9.9M in 2017)

At first glance, that made me wonder why revenue is trending the wrong way. Even SAIL’s Q2 guidance is showing revenue between $49.5M and $50.5M. However, looking closer at the Q4 2017 earnings report, each revenue category was up from the previous year:

Licenses: +65% YoY
Subscriptions: +51% YoY
Services & Other: +23% YoY

There is some seasonality in play, and I’ll need another earnings report or two to have a better handle on it. Also, 2017 ended up with $186.1M in revenue, and they are projecting 2018 full year revenue of $225M-$229M. Going back to Bear’s comment about SAIL growing slower than OKTA, that’s true, but I wouldn’t call their growth slow in general. OKTA had 67% YoY growth in Q4 2017. SAIL has had two consecutive quarters of +50% YoY subscription growth.

They’ve passed the May 16th lockup expiration, and the stock has rebounded nicely (up 18.8% since then). With a market cap of $2.34B and a P/S ratio of 10.4 when using the 2018 revenue guidance, I feel there is more run room and of course some more questions to be answered along the way. I’m staying in, and I’d expect both SAIL and OKTA to continue growing. I don’t think only one will continue to find success, rather both of them.

Note: I really appreciate all of the research and information that many of you post in this forum. I’m still learning what factors are important to analyze, and how to present my findings. I’d welcome any questions or suggestions on additional information to gather for a company like this that hasn’t been on the stock market for too long.

-ElonFeeNix
Long SAIL

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Thanks ElonFeeNix! Let me just highlight a couple things from your update:

Subscriptions: $23M, +54% YoY

Certainly seems like this would be the line to watch. Subscription revenue growing much faster than overall revenue is a good thing, and the fact that it’s less than 50% of total revenue means that this effect is probably a bit “camouflaged.”

With a market cap of $2.34B and a P/S ratio of 10.4 when using the 2018 revenue guidance, I feel there is more run room and of course some more questions to be answered along the way. I’m staying in, and I’d expect both SAIL and OKTA to continue growing. I don’t think only one will continue to find success, rather both of them.

I agree on all counts. This is a lot less pricey than OKTA whose forward PE is still around 15, even after the share price fell.

Please let us know if you have any more info on the competitive environment. I know they partner with OKTA and…I’ve been trying to resist the pun, but a rising tide can lift all boats. Anyway, SAIL said they have 984 customers. OKTA has 4,700. Could be an sort of cross-selling opportunity there – but I’d be interested to hear more about the dynamics.

Thanks again!

Bear

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I solved the OKTA vs SAIL dilemma by buying a small hunk of each, together they make one standard sized holding.

https://www.seeitmarket.com/getting-to-know-15-recent-tech-i…

SAIL recently reported Q1 results with 40% Y/Y revenue growth with subscription revenue most importantly growing 54%, and unlike many of the other names is operating profitably. The recent media discussion of data sharing and the European General Data Protection act play right into SAIL’s identity control solutions. Security breaches often come from misuse of identity credentials and SAIL provides solutions for enterprises to manage and secure its identities.

. SAIL believes to have penetrated just 2% of approximately 65,000 companies needing its solutions.

According to Gartner, by 2020, data-centric audit and protection (“DCAP”) products will replace disparate siloed data security tools in 40% of large enterprises, up from less than 5% today. SAIL is set to benefit from industry tailwinds like identity pervasiveness, automation, and stricter compliance obligations. My take on SAIL is shares are very attractive at this level and a must-own name in cyber security. The company is growing strong, moving to more of a subscription model, adding customers and in the early stages of benefitting from multiple industry tailwinds.

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Beat and raise :slight_smile:

"SailPoint Technologies (NYSE:SAIL) gains 11.7% aftermarket on Q2 results that beat EPS and revenue estimates with revenue up 39% on the year to $54.56M. Q3 guidance has upside revenue from $54.5M to $55.5M (consensus: $53.12M) and in-line EPS of -$0.02 to -$0.01 (consensus: -$0.02).

Raised upside FY18 guidance has revenue from $233M to $236M (consensus: $227.50M; was: $225M to $229M) and EPS from $0.12 to $0.14 (consensus: $0.08; was: $0.07 to $0.09)" :

https://seekingalpha.com/news/3380504-sailpoint-plus-11_7-pe…

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